Countrywide Revises Earnings Estimate for 2003

Countrywide Financial Corp. on Monday revised its earnings estimate for last year after higher interest rates eroded demand for refinancing in the fourth quarter.

The Calabasas-based company said earnings probably were $12.30 to $12.45 a share, compared with a previously forecast range of $12 to $13.50. The stock fell as much as 4.2% during the day.

U.S. mortgage lenders had a 47% drop in volume in the fourth quarter from a record high in the prior quarter as rates increased, according to the Mortgage Bankers Assn. in Washington. Lending volume fell to $564 billion in the last three months of 2003, the lowest of the year, after reaching a record $1.06 trillion in the third quarter.

“As anticipated, refinance activity declined during the quarter due to higher mortgage rates,” Stanford L. Kurland, Countrywide’s president and chief operating officer, said in a statement.

The average rate for a 30-year fixed mortgage was 5.9% in the fourth quarter, compared with a low of 5.5% in the second quarter, the bankers association said. The market share for refinanced loans fell to 49% from 68% in the third quarter.

Countrywide, the third-largest U.S. mortgage lender, forecast that 2004 earnings would be $9 to $12 a share, the same as an earlier prediction. Analysts on average expected the company to earn $13.05 a share in 2003 and $10.25 in 2004, according to a Thomson Financial poll.

The company will report earnings Jan. 27. Countrywide had the third-highest origination volume in the third quarter, at $125.9 billion, following Wells Fargo & Co. and Washington Mutual Inc.

For December, Countrywide lent $25.1 billion, a 13% increase from the previous month, the company said Monday. The volume was down 29% from the $35.2 billion lent in the year-earlier month.

Countrywide shares fell 86 cents to $71.18 on the New York Stock Exchange.